What Did Anwar's Economic Reforms Do? Diesel Subsidies, RON95 and the Investment Scorecard

If a prime minister truly wants reform, where does the first cut fall?

Anwar did not begin with the big words in his speeches.

He began at the petrol station.

After June 10, the posted diesel price in Peninsular Malaysia was no longer RM2.15 but RM3.35. Sabah, Sarawak and Labuan remained at RM2.15; selected industries, public transport, logistics operators and eligible individuals continued receiving support through different mechanisms. ^1,2

This was one of the Anwar government's most important and politically daring economic moves.

Because a subsidy is not just a number.

It is a habit.

The Diesel Cut#

Malaysia has long used cheap fuel to lower household and business costs.

The problem is that a blanket subsidy does not ask who you are. The poor receive it, and so do the rich; residents receive it, and so do smugglers; lorries that genuinely need support receive it, and so do arbitrageurs who should not. ^1,2,9

The Anwar government converted the Peninsular diesel subsidy into targeted support. The Finance Ministry later said BUDI Diesel had saved about RM5 billion a year since its introduction in June 2024. ^1,2

This was not a small reform.

It touched something many previous governments knew needed repair but feared because of voter backlash.

RON95 Was Not Fully Released#

Petrol is more sensitive.

Diesel is used heavily in business, logistics and selected vehicles. RON95 is the price ordinary people see every day.

So the government did not let RON95 jump directly to the market price. It introduced BUDI95 in 2025. The Finance Ministry said the government allocated about RM11 billion to subsidise RON95 so eligible users could buy it at RM1.99 a litre; the unsubsidised pump price was about RM2.60, with expected annual savings of RM2.5 billion to RM4 billion. The fiscal update also states that BUDI95 uses a monthly quota of up to 300 litres for eligible users. ^3,4

This is the character of Anwar-style reform.

Money is no longer scattered indiscriminately.

But the government does not dare let go completely either.

The Numbers on the Scorecard#

Economic data gave the Anwar government some confidence.

DOSM says Malaysia's economy grew 5.2% in 2025, with nominal GDP at about RM2.03 trillion; Bank Negara also reported 5.2% growth and average inflation of 1.4%, the lowest in five years. ^5,6

Approved investment also looked strong.

MIDA says approved investment reached RM378.5 billion in 2024, then a record; in 2025 it rose again to RM426.7 billion, setting another record and carrying an estimate of more than 240,000 new jobs. ^7,8

These figures should not be lightly dismissed.

After frequent changes of government from 2020 to 2022, growth and investment approvals in 2024 and 2025 show that stable government, industrial policy and international investor confidence did have an effect. ^5,6,7,8

But an Approval Letter Is Not a Job Card#

Stop here for a moment.

Approved investment does not mean a factory is complete.

Approved investment does not mean every ordinary household has received a pay rise.

Data centres, semiconductors, electric-vehicle supply chains and cloud investments can improve the national accounts, but they can also strain electricity, water, land, skilled labour and regional distribution. MIDA's figures are "approved investments", not proof that every project has materialised or every job already exists. ^7,8

So the Anwar government can say its economic management has achievements.

People can also ask: why do I see GDP growth while life still feels tight?

Both sentences can be true.

Reform's Pain Point#

Subsidy cuts inevitably create friction.

Higher diesel prices affect transport costs, and traders may also use them as an opportunity to raise prices. The government can soften the impact through enforcement, cash aid and targeted subsidies, but it cannot pretend there is no impact. The World Bank also warns that lower subsidy and social-assistance spending depends on fuel and electricity subsidy rationalisation proceeding as planned; delays and external shocks remain risks. ^1,2,4,9

This is the hardest part of fiscal reform.

Everyone knows blanket subsidies leak.

But when the pipes are repaired, the people inside the house hear the hammering first.

The next ledger is not about what the government has done.

It is about what it promised but has not delivered; because the ugliest line in a government's accounts is often not the money spent, but the promise still sitting in its manifesto.